Should Spanish VAT be charged

Should Spanish VAT be charged

Didn't find your answer?

I suspect I know the answer to this - but seem to be going round in circles to prove it.

My clients currently sell (export) goods to Spain - charging UK VAT to those individuals without VAT/IVA numbers and zero rating to businesses who are VAT registered

They now plan to carry out occassional installation work in Spain of their products - which I assume then becomes the point of supply.

As such they don't have to charge UK VAT - but do they have to register for and therefore charge Spanish VAT ?

It makes a big difference as much of the sales will be to un VAT registered individuals

Could someone help clarify for me ?

If they have to register - how can it be done cheaply and easily as the volumes wont be high enough to justify large Spanish legal & accountancy bills etc

Thanks
Derek House

Replies (3)

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By frauke
11th Jul 2007 15:36

VAT reg in Spain
No they don't have to be VAT registered in Spain, but they will not be able to reclaim any of the VAT paid on expenses whilst carrying out the work.

One word of warning - the spanish are quite strict about letting people working for a non resident company (which your client is) work in spain. Your client will have to arrange for a E101 for each of the engineers who they use.

Engineers of one of my clients carry spares which are sometimes installed and sold. They have to provide full details of what was supplied with full travel details, all signed by the customer as proof that the items were taken out of the UK and not returned. This is now an acceptable proof of export in the EU only - ever since you cannot find a member of HMC&E at the ports anymore!

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Euan's picture
By Euan MacLennan
11th Jul 2007 17:41

Are you sure?
Under s.7(3) VATA 1994, the goods are treated as supplied outside the UK where their supply involves their installation at a place outside the UK to which they are removed. They are therefore not subject to UK VAT, but I think it means that the clients will have to register in Spain and charge Spanish IVA; it follows that they will be able to recover IVA on business expenditure in Spain.

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By User deleted
14th Jul 2007 10:53

Circles
Thanks - I tend to agree they should register in Spain - it's frustrating that it is so difficult to get the definite answer though !

Derek

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